October, 27 2006
Indian steel minister calls for controlled iron ore exports
Indian steel minister has called for gradual phasing out of iron ore exports as unabated ore exports would put Indian steel industry in a problem and at the same time the mining community is not hit hard. As per reports, the steel minister also said that he has no objections on export of iron ore fines which are not utilized by the domestic steel industry, paving a way for breaking deadlock on the issue.
Mr Ram Vilas Paswan union minister of steel told reporters We are seeking gradual phasing out of exports of ore in view of rising production capacity of the domestic steel industry. The current ore reserve is slated to last for only 60 to 70 years. If the present level of ore exports continues, then we would have to borrow the mineral in times to come. Mr Paswan pointed out that the current estimated ore reserve in the country was about 22 billion tonnes of which 8 billion tonnes was proven reserve and if exports continued, then it could hit the steel industry hard.
However a report in the Indian Express quoted Mr Paswan as saying that We offer no opposition to export of iron ore fines which are not being utilized by the industry but reiterate that export of high grade iron ore should be curtailed in a phased manner. We understand that employment of many people is dependent on mining and we do not want their livelihood to be endangered by a sudden clampdown on exports.
Mr Paswans reported views open up a window for reconciliation between the steel and mining lobbies as a majority of iron ore exports from the country today are in the form of fines.
Indian steel minister supports SAIL for overseas acquisitions
It is reported that Mr Ram Vilas Paswan union minister of steel feels that Steel Authority of India Limited should look at overseas market for acquisition of steel plants.
Mr Paswan told reporters The steel market is in consolidation phase and successful examples could be seen in Mittal Steels acquisition of Arcelor and TATAs deal with Corus. SAIL is also strengthening its position in the domestic market through capacity expansions and mergers and they could also look to acquire companies abroad on their strength.
He said that already efforts are being made by the PSU to forge global alliances for raw material sources like coking coal. He added that We would support any proposal of SAIL to acquire steel companies abroad.
Steel ministrys PSUs profit for H1 up by 17%
It is reported that all the 15 public sector enterprises under the steel ministry have recorded a combined profit of Rs. 11497 crore in the financial year 2005-06, more than double of what they had achieved in the fiscal 2003-04.
Mr Ram Vilas Paswan union minister of steel told reporters that all PSEs under his Ministry have also shown a significant improvement of around 17% in the first half of 2006-07 in earning profit before tax. The amount registered so far is Rs.6600 crore as against a combined tax profit of Rs. 5649 crore in the comparable period last year.
Mr Paswan said that this was made possible following an increased output of value added products, improvement in techno-economic parameters like blast furnace, productivity, energy consumption, improved labor productivity, steel price buoyancy and improved corporate governance. The improvement was registered despite a sharp rise in inputs and costs.
Hirakund farmers start protest against Arcelor Mittals plant
Statesman News Service has reported that thousands of people, mostly farmers from Sambalpur, Bargarh, Sonepur and Jharsuguda districts gathered from Hirakud to Burla gathered at NH 6 forming a human chain to protest against the construction of the proposed steel plant by Arcelor Mittal at Chipilima.
The protestors said that agriculture in the Hirakud command area would be severely affected due to the steel plant and as such water from the Hirakud reservoir wouldnt be adequate to feed both industry and agriculture. One of the activists said that the very purpose of constructing Hirakud dam would be defeated if Mittal group is permitted to have their plant here.
As per the protestors, the anti populace move of the government would at least affect 50,000 hectares of agricultural land and thousands of farmers and agricultural workers will lose their livelihood. They said At no cost, the farmers of the region would agree for a steel plant at Chipilima, a part of the Hirakud command area being suitable for agriculture.
Mr Lingaraj president of one of the protesting organizations threatened that If the government does not pay heed to this peaceful demonstration and the genuine demands of the farmers, then we will resort to sitting in dharna in front of the Orissa Assembly.
MSLs net profit surges by 119% YoY in Q2
Maharashtra Seamless Ltd has announced unaudited results for the July to September 2006 quarter. MSL has posted a net profit of Rs 621.80 million for Q2 of 2006-07 as compared to Rs 283.70 million during Q2 of 2005-06.
MSLs total income net of excise during July to September 2006 has increased to Rs 3533.80 million up by 66% YoY as compared to Rs 2123.30 million in July to September 2005.
Royalty on iron ore mining may undergo change
It is reported that Indian government is considering recommendations of Hooda Committee with regard to levying royalty charges on an ad valorem basis on iron ore captive mining. If implemented, it could make a big change in the bottom lines of Indian steel majors.
As per reports steel ministry is of the opinion that steel firms and miners are making a killing on iron ore. At present, steel manufacturers and miners pay Rs 16 per tonne as cess and Re 1 per tonne as royalty for using iron ore from captive mines. As against this, iron ore is available at $70 per tonne in the global market, depending upon the quality and costs around Rs 2,000 per tonne in the domestic market. With the cost of mining iron ore is estimated at around Rs 250 per tonne, captive mine owners are making huge profits.
GMR to hive off ferroalloy business to a separate company
It is reported that GMR Industries is hiving off its ferroalloys business into a separate company called GMR Ferro Alloys & Industries Ltd.
GMR Industries board has approved the demerger based on ratio determined by Deloitte Haskins & Sells.
GMR is expecting to obtain mining lease in Orissa, which it expects would result in significant reduction in raw material cost.
Goa miners to build a bridge as corporate social responsibility
It is reported that the Goa Mineral Ore Exporters Association has signed a MoU with state government for construction of a four lane bridge at Usgao within a year. The new bridge would be constructed 30 meters downstream and parallel to existing single lane bridge. The new bridge to be built at a cost of Rs 22 crore will connect the Usgao village with Pale village.
As per the agreement the GMOEA would construct the bridge at its own cost and hand it over to the state PWD two years after building it for regular maintenance. The government and the GMOEA have agreed not to levy toll on the new bridge.
The GMOEA has assigned the work of construction to Goa Infrastructural Development Company Private Limited, which has already allotted the work to the successful bidder in the tender process.
The state PWD has meanwhile acquired the land required for construction of new bridge and obtained necessary approvals from the town and country planning department. The PWD would co-ordinate with the GMOEA and finalize the designs, parameters and technical specifications of the bridge.
Mr Shivanand Salgaocar president of GMOEA told the reporters that construction of the bridge was part of continuing corporate social responsibility of mine exporters. He said that the proposal was given to the state government over four and half years ago but delay in decision-making delayed the building of the bridge.
POSCO grants scholarships to students from Orissa
Statesman News Service has reported that 35 students of Utkal University, Biju Patnaik University of Technology and Kalinga Institute of Industrial Technology have been granted scholarships by the POSCO TJ Park Foundation of South Korea. The students will receive an annual grant of $500 which will continue till completion of their course.
Mr Soung-Sik Cho MD of POSCO India said that this was part of the long term commitment of POSCO to the people of Orissa. He said South Korea did not have any natural resource as such and therefore it had built upon human resource. He said Resources are limited, creativity unlimited is the inspiring statement at Pohang steel works.
POSCO TJ Park Foundation has already awarded research grant of $10,000 to two scholars from India and one of them is from Utkal University. Five students from India have also been sent to Korea under a fellowship program of the foundation of whom two are from Utkal University.
Elecon Engg to supply wagon tippler to NTPCs Kahalgaon plant
Elecon Engineering Company Ltd has bagged an order worth Rs 70.19 Crores from NTPC Ltd for designing, engineering, manufacturing, testing, supplying, erectioning and commissioning of wagon Tippler package for Kahalgaon Super Thermal Power Project.
Nippon Steel H1 net profits dip by 16% YoY
Japan's largest steelmaker Nippon Steel Corp announced that its first half net profit fell by 16% YoY in the absence of one off appraisal gains on its steel inventories. But it lifted its full year forecast due to buoyant global demand.
Net profit of Nippon fell to 164.10 billion yen during April to September 2006 as compared to 195.68 billion in April to September 2005. Its operating income also declined by 11.6% YoY to 266.37 billion yen despite a 6.4% YoY increase in sales to 1.98 trillion yen. Nippon Steel booked a special gain of 60 billion yen from the reappraisal of its steel inventories and carried-over raw materials during this period.
Mr Nobuyoshi Fujiwara executive VP of Nippon told a news conference that If we eliminate the special gain made last year, the underlying profit margin actually improved.
Nippon Steel produced 17.16 million tonnes of crude steel during the first half up from 17.08 million tonnes a year earlier. Its average delivery price of steel products rose to 75,200 yen per ton in July to September quarter to September from 71,600 yen in April to June 2006.
Mr Fujiwara said Demand for high end steel products from automakers and shipbuilders remained strong, while demand for low grade products has also been brisk as an expanding US economy absorbed increased supply from Chinese makers.
China sets guidelines for overseas investments
China's State Council has approved the first guideline policy document for Chinese enterprises investing overseas. The document, titled "Opinions on encouraging and regulating overseas investments by Chinese enterprises", was adopted at a meeting chaired by Premier Mr Wen Jiabao.
The document says China's overseas investments must follow the principles of mutual respect, mutual benefit, complementarities and win-win cooperation. It stresses the need for proper guidance and coordination of firms to prevent competition among Chinese businesses in order to safeguard national interests.
The document calls for improved supervision of the management of state owned assets overseas and the establishment of proper risk assessment and cost management systems for overseas ventures. When investing overseas, the document says, Chinese enterprises must observe local customs and laws, be fair and transparent in dealing with engineering contracts, protect the interests of local employees and the environment, and support local charities.
Chinese enterprises must strive to improve the quality of their products and services to boost their international competitive edge, the document says.
In response to growing terrorist threats, the document calls for more efforts to protect the safety of employees and the properties of overseas Chinese businesses. It also urged overseas businesses to safeguard their image as well as the image of the country, and spread China's policy of peaceful development.
China is a rising international investor. Its overseas investments surged 123% in 2005 to reach $57.2 billion at year end. The figure is expected to rise by a further $60 billion by 2010.
Esmark sweetens offer for Wheeling-Pitt
Esmark Inc, in its quest to acquire Wheeling-Pittsburgh Corp has sweetened its offer by including up to $200 million rights offering of the steel makers common stock. The move by Esmark comes a day after Wheeling-Pittsburgh and CSN agreed to combine North American assets, sparking a fresh round of potentially bruising proxy battle for control of the company.
Esmark said in a statement that it expects the purchase price for shares in the rights offering to reflect a discount from the valuation of Wheeling-Pittsburgh shares in the proposed merger. It said that consistent with its prior proposal, it is anticipated that proceeds will be used to provide additional liquidity for working capital purposes, capital expenditures, share repurchases and other general corporate purposes.
Esmark's proposal allows shareholders to cash out at $20 per share if the two companies merge, but the change acknowledges that many might prefer to remain investors in the new company. This plan would give them that option and prevent a dilution of their stock value. Franklin Mutual Advisers would act as a standby purchaser of any stock purchase rights that shareholders did not exercise.
Mr James Bouchard CEO of Chicago based Esmark said that Current investors could participate in the upside of creating one of the finest steel distribution companies in the United States at a price lower than what Esmark shareholders are paying.
Wheeling-Pittsburgh said that its board would evaluate the merits of a proposal by Esmark if and when it receives a written copy.
Aztec secures funding for Koolan and rejects Mt Gibson bid
Aztec Resources Ltd announced that it has won credit approval for a A$100 million finance facility to fund the continued development of the Koolan Island Iron Ore Project. Following the finance approval, Aztec said it has again rejected a revised takeover bid by Mount Gibson Iron Ltd. The bid has now been declared unconditional with a shortened time period for payment to Aztec shareholders.
Aztec had been negotiating with a banking syndicate for the finance but was unable to finalize the loan until the Australian Royalties Corporation Pty Ltd's rights over the project had been removed. A deed of settlement and release, terminating the royalty and repurchase rights held by ARC was signed earlier this week.
Shandong Jiuzhou to set up a tin mill in Jinhua
A contract has been signed by Shandong Jiuzhou Group and Jinhua municipal government for the cooperative construction of a 200,000 tonne per year tinplate mill in Jinhua's Jindong Development Zone.
With a total investment of RMB 480 million, the mill will report sales income of RMB 1.5 billion and tax of RMB 480 million once put into production.
(Sourced from Mysteel.net)
Zinc hits record high on LME
Zinc rose to a record for a second day in London Metal Exchange after Mr Greig Gailey CEO of the worlds 2nd largest producer of the Zinc Australian Zinifex Ltd said Prices are being supported by continued strong global demand for zinc, particularly from China, and a well documented shortage of zinc mine capacity.
Zinc for delivery in three months on the LME advanced by $100 or 2.5% to $4,140 a tonne as of 12:04pm local time after climbing to a record $4,145. LME monitored inventory dropped to a 15 year low as stockpiles declined by 1.5% to 113,900 tonne.
Global zinc demand was already forecast by Societe Generale to outpace production by 420,000 metric tonne this year. Global use will increase 3.9% to 11.1 million tonne this year and 2.6% to 11.4 million tonne in 2007 as per the International Lead and Zinc Study Group.
WTO starts investigation on duties by US on steel imports from Mexico
The World Trade Organization has begun an investigation into a complaint from Mexico that the United States has levied illegal duties on Mexican steel exports after Mr Carlos Vejar Borrego a Mexican diplomat told the WTO's dispute settlement body that the US Department of Commerce has imposed excessive antidumping duties on steel from Mexico in violation of international trade rules.
Mr Vejar Borrego said Mexico had been extremely patient before bringing its case to the global commerce body. It is the first time Mexico has launched a complaint at the WTO.
The United States accepted the launch of a formal investigation by a special panel, even though it could have temporarily delayed the panel's establishment. Mr David Shark American negotiator said that he hoped that Mexico and the US would still be able to reach a negotiated solution.
Esmark ties up with Duferco-IUD for slabs
Duferco International Trading Holding Limited along with Industrial Union of Donbass and Esmark Incorporated announced that they have reached an agreement in principle whereby Duferco & IUD would make available up to 1.4 million tons of slabs on an as needed, annual basis to the Esmark family of companies beginning in the first quarter of 2007.
The supply agreement would extend six years with a provision for automatic annual renewal thereafter and would be available in the event the proposed combination of Esmark and Wheeling-Pittsburgh Corporation is consummated.
Mr James P Bouchard chairman and CEO of Esmark said Duferco & IUD are committed to providing Esmark with a low cost supply of slabs that we believe could be used to restructure the cost structure of Wheeling-Pitt in the event of a combination with Esmark. Duferco & IUD agreement would provide a long term slab agreement that we believe would allow us to expand Wheeling-Pitts current 1.7 million ton per year electric arc furnace output to 2 million tons and increase Wheeling-Pitts total hot strip mill capacity to 3.4 million tons per year without running the high cost blast furnace. In short, this agreement would provide the resources for a combined company comprised of Esmark and Wheeling-Pitt to provide its domestic and international customers with a low-cost steel supply chain.
One of the largest industrial holdings in Ukraine, Industrial Union of Donbass is an integrated producer of steel products, with the annual output of 9.2 million tonnes of liquid steel.
China needs to play bigger role in benchmark iron ore pricing
A Chinese ministry of commerce official called for a bigger role of China in setting benchmark prices for iron ore imports in order to protect the long term sustainability of Chinese steel industry.
Mr Lu Jianhua director of foreign trade at the ministry of commerce while speaking at the China International Steel & Raw Materials Conference in the eastern city of Qingdao said China must participate more in the international pricing mechanism for imported iron ore and we need our companies to play a bigger role.
Mr Jianhua said that a more unified front by local steelmakers during the annual price setting process would mean more affordable raw materials for mills across China and sustainable growth for both mines and mills. He said We want to encourage rational and reasonable raw material prices to ensure stable and fair growth for both producers and consumers of iron ore.
11 killed in Xinyu coal mine explosion in Jilin province
Xinhua has reported that 11 miners were killed when a gas blast ripped through a Xinyu Coal Mine in Baishan City's Jiangyuan District in northeast China's Jilin Province at 2:16 AM local time.
There were 11 miners working underground at the time of blast and rescue efforts were kicked off immediately after the mishap. All the 11 trapped miners were found dead five hours later.
Cause of the blast is being investigated.
China is the world's largest coal producer and consumer. However, Chinese coal mines are considered the deadliest due to high rates of accidents. On an average, 12 miners die every day in Chinese coal mines.
China driving iron ore growth in Western Australia
Australian state government predicts that China's purchases of Australian iron ore are will double to around 300 million tonnes per year by 2015 from 2005 levels. The forecast of a doubling in exports assumes a rate of Chinese import growth of around 9% per annum, a conservative estimate when compared to actual import growth of 23% in the last three years.
Mr Gary Stokes deputy director general of Western Australia's Department of Industry and Resources while speaking at the China International Steel & Raw Materials Conference said that Western Australia has sufficient resources to meet such demand with iron ore output potential of around 555 million tonnes by 2015.
Mr Stokes said China is now driving the development of Australia's mining industry due to the rapid expansion of Chinese steel output. He said that In the 70s and 80s, Japan drove the iron ore market for us, and in the 90s it was South Korea and Taiwan and now China is boosting the sector.
Western Australia accounts for over 97% of Australia's output of iron ore. In 2005, China overtook Japan as Australia's largest customer for iron ore, now buying around 54% of its exports. China sources 40% of its iron ore imports from Australia.
Shagangs Rongsheng to set up a new billet caster
Shagang Groups subsidiary Zhangjiagang Rongsheng Steelmaking Co has placed an order with Concast for the supply of a 5 strand billet caster for producing 150mm & 160mm square billets at Zhang Jia Gang City in the Jiangsu Province.
The high speed caster with an 8 meters radius will be supplied with a CCS-Concast straightener, mold and retractable oscillator as well as secondary cooling.
Chelyabinsk Pipe commissions anticorrosion coating line
It is reported that Chelyabinsk Pipe Plant has commissioned the second line for application of outside 3 layer polyethylene anti corrosion coating to pipes. The line is to reach its full capacity in November.
With this line the coating capacity of Chelyabinsk Pipe Plant will almost double to 0.6 million tonnes per annum.
Massey Energys Q3 revenues up by 11% YoY
Massey Energy Company reported that produced coal revenues for its third quarter ended September 30th 2006 increased by 11% YoY to $462.4 million from $418.3 million in the third quarter of 2005, while net income of $24.2 million in the quarter increased from net income of $22.5 million in Q3 of 2005. EBITDA rose by 5% to $104.2 million in the third quarter of 2006 from $99.4 million in the third quarter of 2005.
Massey sold its 5.5 million tonne Falcon reserves located in Boone County of West Virginia to a privately held company for approximately $31 million in September and the sale increased pre tax net income by $30 million and fully diluted EPS by $0.24 per share. Also included in the third quarter 2005 net income was a pre tax, non cash gain on a coal reserve exchange of $38.2 million.
Massey produced 9.4 million tonne of coal in Q3 of 2006 as compared to 10 million tonnes in Q3 of 2005 and 10.2 million tonnes in Q2 of 2006.
Mr Don L Blankenship chairman and CEO said "Massey achieved record revenue per ton during the third quarter, and earned a margin per produced ton of $6.79, despite continuing Company specific and regional operational challenges. The difficult re start at Aracoma and the delayed start-up of the dragline hindered margin growth. In the longer term, we expect margins to expand significantly as both the Company specific and regional challenges are met."
Kardemir to install vacuum degasser
Karabk Demir Celik Sanayi ve Ticaret AS of Turkey has placed an order with Concast AG to supply a 90 tonne VD tank degasser with mechanical vacuum pumps. The VD plant will be integrated into the existing production chain of Karabk 90 tonne BOF meltshop to treat steel coming from the BOF route. Commissioning is scheduled for January 2007.
The supply package includes the mechanical and electrical equipment including the three stage mechanical pump, filters and dust collection system, an automatic wire feeder, level 2 automation and technical assistance for the production of vacuum-treated steel grades.
With the commissioning of this facility Kardemir will be able to cater to the growing domestic demand for special steel grades.
Turkey's shipbuilding takes 5th place in global ranking
Due to projects implemented by the Turkish ministry of transport in the last 4 years to increase shipyard capacity, Turkeys worldwide market share in shipbuilding has risen from 0.9% to 1.4% making Turkey 5th in shipbuilding behind Germany who occupies 4th place with a share of 3.6%. With these developments the Turkish ministry of transports bureau for maritime affairs has expanded its goals to become 4th by 2010.
Mr Binali Yildirim Turkish minister of transport told Zaman Shipbuilding capacity has increased by an average of 65% in the last four years. The number of shipyards operating or about to start operating in Tuzla as well as in the Black Sea, Izmit Gulf, Yalova, in the Aegean or Mediterranean has reached 60. We used to build ships of up to 20,000 tonnes maximum but we are currently able to build ships of up to 60,000 tonnes to 70,000 tonnes.
As per reports, Turkish shipbuilding capacity rose from 654,000 DWT to 1.4 million DWT since 2003 and the amount of sheet steel processed in shipyards has doubled. Maintenance and repair capacity have also seen a considerable increase. A million ton yearly capacity has been reached with the restructuring of some other shipyards.
Northwest Pipe to supply pipes for East Fork Raw Water Supply Pipeline
Northwest Pipe Company has secured a $15 million order to supply about 43,000 feet of 84 inch diameter steel pipe to Bar Constructors of Lancaster in Texas for the East Fork Raw Water Supply Pipeline. Delivery under the contract is scheduled to begin in the second quarter of 2007.
The pipes would be manufactured at Saginaw in Texas and Parkersburg in West Virginia facilities of Northwest Pipes.
Northwest Pipe Company manufactures welded steel pipe in three business segments Water Transmission, Tubular Products Group and Fabricated Products Group manufactures propane tanks and other fabricated products. The Company is headquartered in Portland, Oregon and has nine manufacturing facilities across the United States and Mexico.
Elfouladh to put a new EAF
Tunisian steelmaker Elfouladh, SociTunienne de Sidurgie has ordered Concast for a 25 tonne arc furnace. The new arc furnace, with an annual production of 230,000 tonnes will be equipped with EBT lip and ConsoTech burner. Commissioning is scheduled for the end of 2007.
This order follows successful revamping of the existing ABB-EAF which was likewise carried out by Concast as recently as June 2005.
Nizhny Tagil overhauls dust catchers for 2 open hearth furnaces
Evraz Groups Metallurgical Industrial Complex of Nizhny Tagil JSC has renovated dust catcher system for two open hearth furnaces recently. Due to the opportune repairs, the dust systems of two open hearth furnaces are now operating at full capacity and comply with all the approved standards.
The overhaul of No 5 furnace main environmental safety unit took 90 days and included replacement of the main system equipment and of the exhaust heat boiler. No 15 furnace gas cleaning system has also undergone a technical reconstruction within a scheduled maintenance works that lasted 40 days.
Change of guard at ANR
The board of directors of Alpha Natural Resources Inc has appointed Cleveland-Cliffs Inc Chairman Mr John S Brinzo as a director at its regularly scheduled meeting today. Mr Brinzo retired from Cleveland-Cliffs as its CEO last month and has announced his intention to retire as chairman in early 2007.
Concurrently, the board accepted the retirement of director Mr Fritz R Kundrun.
Alpha's board also approved the appointment of Mr Michael J Quillen Alpha's president and CEO as chairman. He will replace Mr Hans J Mende who has chosen to step down from that role and will remain a director. Director Mr E Linn Draper Jr. will assume the newly created role of lead independent director which will facilitate greater independent leadership of the board.
Mr Mike Quillen said "John Brinzo is a terrific addition to our board, bringing with him a wealth of experience and financial acumen from the steel and mining industries. At the same time, we thank Fritz Kundrun for his service to the board since the formation of Alpha two years ago, and Hans Mende for serving as non executive chairman during this same critical time period."
Mr Kushnarev appointed as GD of Vostochny Port
Mr Sergey Kushnarev has been appointed as GD of Vostochny Port OJSC after Mr Maksim Dovolnov head of the Port since April 2006 has terminated his powers. Mr. Kushnarev will solve strategic tasks relating to the further development of the port infrastructure and build-up of the Port's cargo base.
Vostochny is the largest port in the Far East of Russia. It is located in an ice free deep harbor suitable for handling large tonnage ships of up to 150,000 tons. The Port specializes in operations in general, bulk, lumber cargos, large tonnage containers, coal and mineral fertilizers. Its annual throughput capacity is above 18 million tons. Vostochny Port is controlled by companies of the Kuzbassrazrezugol Holding.
